AIA Australia Financial Wellbeing Advice Manager and 5-time Paralympian Tristan Knowles shares his insights on how to be protected for the unexpected as you weave through life.
I was unlucky enough to go through childhood cancer when I was nine years old. My left leg was amputated above the knee, and I went through a relapse where my chances of survival were only about 10%. I also lost my mum to early onset dementia when she was 59 years old. So I was forced to learn from a very young age that life can be really unpredictable – and that it’s also really, really precious.
As we all get older and navigate different stages of life, we unfortunately might go through a whole range of tough, often unexpected experiences, or see them happen to the people we love.
For me, financial wellbeing isn’t about being rich or having enough money to not lose any sleep at night. It means having a solid protection plan in place that will help me get through any tough times while I focus on being excited about the future, about achieving my goals, and about spending time with the people I love.
Life insurance for ‘just in case’
We know there’s a sexy side of financial planning: building wealth, making sure your Kiwisaver or other finances are set up for your retirement, and maybe setting up other investments. But no one likes to talk about what you’ll do if things go wrong.
Our financial wellbeing affects our physical and mental health: our feelings, thoughts, and perceptions about finances affect our overall wellbeing. It’s an important aspect that is often overlooked.
If you ask me, the most important part of a financial plan is making sure you’re covered for the ‘what ifs’ so you can focus on doing all the things you love. So much of my joy comes from spending time with my family and building wealth. I need to know that if something were to happen to me, at any point in my life, my family will be okay and my income will be safeguarded.
Types of protection
I like to talk really honestly about life insurance. Chances are, the horrible things won’t happen to you – but there is still a chance. And the last thing you want is to go through a claim only to find out that your insurance policy is not going to pay out. So it’s worth knowing the different types of protection and what they cover.
- Life cover. Helps to protect your loved ones if you were to pass away, including a lump sum payment or an early payment option where a Terminal Illness is diagnosed.
- Income protection insurance. We can argue about it all day long, but your income is the thing that allows you to do the things that bring you joy. To me, ensuring you still have an income if you were unable to work due to illness or injury is fundamental.
- Total and permanent disability. Can cover the costs of lifestyle adjustments if you were to suffer a severe, permanent injury or illness and couldn’t go back to work.
- Trauma cover. Provides a lump sum payment to help assist with costs while you undergo treatment and recovery. Covers scenarios such as cancer, heart attack, and stroke
Protecting yourself at four big life stages
A solid protection plan with the right insurance cover is all about making sure that if anything were to happen, your long-term goals aren’t put in jeopardy. I like to think there are four major life milestones that are great triggers for making sure your protection plan is up to date.
Life stage 1: First job
A solid protection plan with the right insurance cover is all about making sure that if anything were to happen, your long-term goals aren’t put in jeopardy. I like to think there are four major life milestones that are great triggers for making sure your protection plan is up to date.
Life stage 2: Getting married
A solid protection plan with the right insurance cover is all about making sure that if anything were to happen, your long-term goals aren’t put in jeopardy. I like to think there are four major life milestones that are great triggers for making sure your protection plan is up to date.
Life stage 3: Starting a family
A solid protection plan with the right insurance cover is all about making sure that if anything were to happen, your long-term goals aren’t put in jeopardy. I like to think there are four major life milestones that are great triggers for making sure your protection plan is up to date.
Life stage 4: Buying your first home
A solid protection plan with the right insurance cover is all about making sure that if anything were to happen, your long-term goals aren’t put in jeopardy. I like to think there are four major life milestones that are great triggers for making sure your protection plan is up to date.
No matter what stage of life you’re at, my biggest piece of advice is to review your protection plan every three to five years. At the end of the day, you only want to be paying for exactly what you need if tough times ever did eventuate.
Protecting what’s most important with expert advice
Building a protection plan is as straightforward as thinking about where you are now, where you want to get to, and what you want to happen financially if a tough time comes along.
A financial adviser can help you navigate that journey and prompt you to ask yourself the tough questions.
Together, you’ll look at your cashflow and budget – where your money is going, how it could potentially build wealth, how your superannuation is set up – and they will recommend a plan to make sure the things you want to happen can happen, no matter what life throws your way.